@Curious One , thank you for an excellent explanation of the facts of the case. I understand now what you have done and plan to do.
(a) I would therefore conclude and indeed , concur with you that there was never a need for form 3520-A and no 3520 for recognizing the already taxed amounts when transferred to possession. Any amounts not so taxed can be viewed as Investment income ( as you have done in earlier years).
(b) It would be good idea to have all the back-up documents / returns to prove that most has been already taxed by US already and it is remainder/growth that you are now recognizing.
(c) Not being a lawyer , I am bit troubled by the way this source income and its growth has been handled. This is because one usually maintains the same character of the income as reported everywhere or at least to nearest equivalent. Here , in the UK it behaved a retirement account ( tax advantaged retirement savings ) or its equivalent 401(K) , where as in the USA you have treated kind of like a cross between a Roth and a short term investment account. I am of course here that for US purposes , the original yearly amounts ( a part of your salary / consideration) was recognized as wages but for UK purposes these were tax advantaged and therefore legally excluded. So UK never got to tax these with the promise that these will be taxed if you took the benefits while in the UK ( just 401s in the USA. This is where I am troubled and perhaps I should suggest that you could consider talking to a tax lawyer/ pleader in the UK for the UK portion,
Another point that I forgot to make is that I am aware of the use of 8833 for disclosing treaty based positions , especially when US expats retirement accounts in the UK ( private / money schemes etc ) and can exclude some of the amounts from US taxes , but in your case it seems that you have taken all the steps and essentially recognized the whole kitten-kabootle and so it is only the UK issue here--no?
Hopefully I have answered your question.
Is there more I can do for you ?
pk
